It’s important to know your risk profile before making an investment | Mint
Active Stocks
Tue Feb 27 2024 15:57:55
  1. State Bank Of India share price
  2. 749.70 -1.23%
  1. Tata Steel share price
  2. 144.15 1.09%
  1. Power Grid Corporation Of India share price
  2. 292.50 1.65%
  1. Sun Pharmaceutical Industries share price
  2. 1,579.10 1.42%
  1. ITC share price
  2. 411.15 0.48%
Business News/ Money / Personal Finance/  It’s important to know your risk profile before making an investment
BackBack

It’s important to know your risk profile before making an investment

An investor’s risk profile is an essential element in determining the suitability of an investment product
  • The ability to take risk takes into account things such as the age of the investor, level of income of the household, income security, investment horizon and so on
  •  (iStock)Premium
    (iStock)

    An investor’s risk profile is an essential element in determining the suitability of an investment product. There are two facets to this—the ability and the willingness to take risk.

    The ability to take risk takes into account things such as the age of the investor, level of income of the household, income security, investment horizon and so on. Typically, a young investor who has a secure income is able to take more risk for a long-term goal. The same investor’s ability to take risk for a near-term goal will be lower and, accordingly, the investment choice will be different. It’s also important to consider the willingness to take risk. An investor may be uncomfortable with higher levels of risk even if they are able to take risk. Older investors with less experience and understanding of markets and investments may be unwilling to take greater risk even for better returns.

    Risk profiling questionnaires are typically used to determine an investor’s attitude to risk before an investment product is suggested.

    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
    More Less
    Published: 05 Aug 2019, 08:55 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App